- The Washington Times - Friday, July 20, 2001

AGENCE FRANCE-PRESSE
SINGAPORE — Southeast Asia must redouble efforts to "regain its lost luster" as the region faces an economic downturn and key members battle political problems, according to Singapore Foreign Minister S. Jayakumar.
The credibility and cohesion of the Association of Southeast Asian Nations (ASEAN) was being severely put to test by these challenges, he said Wednesday in a speech to university students.
ASEAN foreign ministers meeting in Hanoi next week should give top priority to restoring investor confidence in the region and in helping poorer members catch up economically, he said.
Singapore, which has the strongest economy in the 10-member ASEAN, has fallen into recession due to dwindling exports and sharp falls in industrial output.
Economists have for the first time raised the possibility that the city-state's gross domestic product (GDP) growth this year could swing into negative territory from a 9.9 percent expansion last year.
Singapore's ASEAN neighbors, similarly dependent on exports, have also slashed growth projections this year due the slowdown in the U.S. economy and the waning global demand for electronics products.
"With three of its founding members facing domestic challenges and the region experiencing an economic slowdown, ASEAN is experiencing an interregnum, during which its credibility and cohesiveness are being severely tested," Mr. Jayakumar said.
He was referring to Indonesia, which is gripped by a leadership crisis and separatist unrest in some provinces, as well as the Philippines and Thailand, where new governments are preoccupied with domestic problems.
"Even without the financial crisis, ASEAN's expansion to 10 was a challenge in itself, calling for consolidation to allow the newer members to catch up economically," Mr. Jayakumar said. "With these additional challenges ASEAN currently faces, it needs to double its efforts to regain its lost luster."
ASEAN originally grouped Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, but gradually expanded to include Cambodia, Laos, Burma and Vietnam. The regional group is fast losing out to China in attracting foreign direct investments.
Of Indonesia, ASEAN's largest member, Mr. Jayakumar said its problems are complex and a new government would find it difficult to solve all of them immediately.
Indonesian President Abdurrahman Wahid faces impeachment proceedings from parliament, along with challenges by his estranged vice president, Megawati Sukarnoputri, and open defiance of his orders by the armed forces.
Without referring to any particular country, Mr. Jayakumar said "troubled economies are a potential source of instability and conflict, both within and between countries."
"These difficulties must be managed carefully if we are to avoid conflict and maintain a global peace and stability, which would aid economic recovery," he said.

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